Société Régie Networks v Direction de contrôle fiscal Rhône-Alpes Bourgogne.

• Jurisdiction: European Union
• Celex Number: 62007CC0333
• ECLI: ECLI:EU:C:2008:371
• Date: 26 June 2008
• Court: Court of Justice (European Union)
• Procedure Type: Reference for a preliminary ruling
• Docket Number: C-333/07

OPINION OF ADVOCATE GENERAL

KOKOTT

delivered on 26 June 2008 ¹(1)

Case C‑333/07

Régie Networks

(Reference for a preliminary ruling from the Cour administrative d’appel de Lyon (France))

(Competition – State aid – Article 92 of the EC Treaty (now, after amendment, Article 87 EC) and Article 93 of the EC Treaty (now Article 88 EC) – Invalidity of a Commission decision – French support fund for sound radio broadcasting – System of aid which benefits only national undertakings – Funding through a special tax on advertising transmitted by radio and television broadcasting to national territory – Tax also levied on advertising transmitted by radio and television broadcasting from abroad – Temporary maintenance of effects of a decision declared invalid)

I – Introduction

1. In the present proceedings for a preliminary ruling the question put to the Court concerns the validity of a decision on a system of aid taken by the European Commission in 1997. In that decision the Commission decided not to raise any objections to the new version of a French system of aid to support sound radio broadcasting – Aid No N 679/97 (‘the contested decision’).

2. The objective of the system of aid is to provide financial support to small French radio stations with a local audience, which are known as radios associatives. (2) A ‘support fund for sound radio broadcasting’ (3) had been set up for this purpose as early as the 1980s; it was funded by a special tax on radio and television advertising transmitted to France – including both sound radio and television advertising. During the period of relevance here the tax was also levied on advertising that was transmitted to France from abroad.

3. The central issue in the present case is whether the Commission should have accepted this kind of funding for a national system of aid. It affords the Court an opportunity for the first time to elucidate its case-law and consequences with reference to the Van Calster and Others judgment (4) in the context of a system of aid that has been notified to the Commission.

II – Legal framework

A – Community law

4. The contested decision was taken in 1997. The provisions of the EC Treaty as worded in the Maastricht Treaty (5) therefore form the Community law framework in these proceedings.

5. Article 92 of the EC Treaty (now, after amendment, Article 87 EC) formerly read, in part, as follows:

‘1. Save as otherwise provided in this Treaty, any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade between Member States, be incompatible with the common market.

…

3. The following may be considered to be compatible with the common market:

…

(c) aid to facilitate the development of certain economic activities or of certain economic areas, where such aid does not adversely affect trading conditions to an extent contrary to the common interest;

(d) aid to promote culture and heritage conservation where such aid does not affect trading conditions and competition in the Community to an extent that is contrary to the common interest;

…’

6. Article 93(3) of the EC Treaty (now Article 88(3) EC) provides:

‘The Commission shall be informed, in sufficient time to enable it to submit its comments, of any plans to grant or alter aid. If it considers that any such plan is not compatible with the common market having regard to Article 92, it shall without delay initiate the procedure provided for in paragraph 2. The Member State concerned shall not put its proposed measures into effect until this procedure has resulted in a final decision.’

B – National law

7. The French system of aid in question goes back to the year 1982 and came into effect for the first time on 1 January 1983. It was then extended and amended on several occasions. In its version relevant to the year 2001 it is based, first, on Law No 86‑1067 of 30 September 1986 on freedom of communication (6) and, second, on Decree No 97‑1263 of 29 December 1997 which implemented that law and introduced a special tax for the benefit of the support fund for sound radio broadcasting. (7)

8. Article 80 of Law No 86-1067 provides as follows:

‘Sound radio broadcasting services whose commercial resources deriving from broadcasts of an advertising or sponsorship nature are less than 20% of their total turnover shall be granted aid in accordance with the procedure laid down by decree …

To fund that aid a tax shall be levied on revenue from advertisements broadcast on sound radio and television.

Revenue received by sound broadcasting services in connection with broadcasting to support collective or charitable action shall not be taken into account for the purposes of ascertaining the upper limit stipulated in paragraph 1 of this article.’

9. Article 1 of Decree No 97-1263 reads as follows:

‘With effect from 1 January 1998 a special tax on advertising broadcast on sound radio and television shall be introduced for a period of five years to fund a system of aid for the benefit of those licensed to provide sound broadcasting services whose commercial resources deriving from advertisements representing brand or sponsorship advertising are less than 20% of their total turnover.

The objective of this tax is to promote sound radio broadcasting.’

10. Article 2 of Decree No 97-1263 provides:

‘The tax shall be calculated on the basis of the sums, exclusive of agency fees and value added tax, paid by advertisers for the broadcasting of their advertisements to French territory.

Those liable to pay the tax are the persons marketing the broadcasting of these advertisements.

The rate of tax shall be determined in a joint order made by the Ministers responsible for Budgetary Matters and for Communications and shall be graduated according to the quarterly revenue of the party liable to pay the tax, whereby the following upper limits shall apply:

…

II. Television advertising

Up to 3 million inclusive … 6 500

…

from 780 to 840 million inclusive … 7 602 070

from 840 to 900 million inclusive … 8 181 250

over 900 million … 8 760 480.’ (8)

11. Under Article 3 of Decree No 97-1263 the net tax revenue is allocated to a support fund for sound radio broadcasting, which is kept as a separate account in the books of the National Audiovisual Institute. (9)

12. Under Article 4 of Decree No 97-1263 the tax is calculated, assessed and collected by the tax authority (10) for allocation to the support fund’s account under the provisions applicable to value added tax and with the same guarantees and penalties.

13. Articles 7 to 20 of Decree No 97-1263 contain provisions on the aid that the INA pays from the net tax revenue allocated to the support fund. The parties eligible for aid are those licensed to provide sound radio broadcasting services pursuant to Article 1 of Decree No 97‑1263.

14. Under Article 7 of Decree No 97-1263 aid is distributed from the available funds by a panel whose composition and rules of procedure are laid down in that Article 7 and in Articles 8 to 11 of Decree No 97‑1263.

15. Decree No 97-1263 makes provision for three types of aid:

– start-up aid under Articles 12 and 13 of the decree, which is granted to newly licensed radio stations and is limited to FRF 100 000;

– equipment aid under Article 14 of the decree, which can be granted on the basis of documentation submitted by individual radio stations but is only granted once during a five-year period and not less than five years after the grant of start-up aid; equipment aid must not exceed 50% of the amount invested and is also subject to a maximum limit of FRF 100 000;

– annual operating aid granted in accordance with the terms and conditions stated in Articles 16 and 17 of the decree.

16. The basic amount of annual operating aid is established from a table of rates drawn up by the support fund panel. (11) The starting point taken here is a particular radio station’s revenue from normal operations before deducting the advertising marketing costs.

17. The basic amount of operating aid can be increased by up to 60% depending on efforts made by the radio station to diversify its financial resources directly linked to its broadcasting activities, on measures that it takes to provide further professional training for its staff, on the action taken by it with regard to education and culture, on its participation in communal programming measures and on its endeavours in the fields of social communication in a neighbourhood context and integration.

18. It should finally be noted that the system of aid at issue was changed again in 2003. The position now is that only advertising broadcast from France is liable to the tax on radio and television advertising and advertisements transmitted to France from abroad no longer incur the tax. (12)

III – Background to the dispute

A – The Commission’s decisions on the French system of aid

19. The French system of aid at issue had already been notified to the Commission in accordance with Article 93(3) of the EC Treaty on several occasions – for different consecutive periods of time – and in each proposed form had therefore been the subject of various decisions by the Commission. The contested decision of 1997 is one of these.

1. Background to the contested decision

20. In a letter of 1 March 1990 (13) the Commission had already informed the French authorities that it had no objection to the system of aid in the form notified to it at the beginning of 1990 (Aid No N 19/90). The letter does not contain a more detailed statement of reasons.

21. Nor did the Commission raise any objection to the system of aid in the form notified to it in the summer of 1992 (Aid No N 359/92) and it informed the French authorities accordingly in a letter of 16 September 1992. (14) In its...